Sukanya Samriddhi Account (SSA) along with ‘Beti Bachao-Beti Padhao’ (BBB) will be officially launched on 22nd January, 2015. These schemes will be introduced by our honorable Prime Minister Narendra Modi.

Sukanya Samriddhi Account/Yojana is a Small Savings Special deposit Scheme for girl child. This scheme is specially designed for girl’s higher education or marriage needs.

Finance Minister Arun Jaitley had announced this scheme in his budget speech in July. The gazette on this scheme was released on 2nd December, 2014. On 21st January, 2015 the finance ministry released a notification with respect to the applicable interest rate on Sukanya Samriddhi Account.

Let us understand the features and benefits of Sukanya Samriddhi Account Special Savings deposit scheme.

Features of Sukanya Samriddhi Account (SSA):

Who can open the account? – Sukanya Samriddhi a/c (or Khata) can be opened on a girl child’s name by her natural (biological) parents or legal guardian.

What is the Age limit? – SSA can be opened in the name of a girl child from the birth of the girl child till she attains the age of ten years. (Girl child who is born on or after 02-12-2003 can open SSA/SSY account).

How many accounts can be opened? – A depositor may open and operate only one account in the name of same girl child under this scheme. The depositor (or) guardian can open only two SSA accounts. There is one exception to this rule. The natural or legal guardian can open two or three accounts if twin girls are born as second birth or triplets are born in the first birth itself.

How to open a SSA account (Sukanya Savings Account opening procedure)?Accounts in name of the girl child can be opened in post offices or in any branch of a commercial bank that is authorized by the Central Government to open an account under this scheme rules. As of now, the list is not drawn and many government owned banks are still in the process of completing formalities to open the Sukanya Samriddhi Yojana (SSY) Account, you may visit any of the government banks for the purpose of opening the account. (Some of these banks include – State Bank of India (SBI), SBH, Bank of Baroda, Punjab National Bank, Bank of India, Canara Bank, Andhra Bank, UCO Bank, Allahabad Bank, Corporation Bank etc.,)

What is the minimum deposit to open the account? – The account may be opened with an initial deposit of one thousand rupees. The minimum contribution in any financial year is Rs 1000. Thereafter the contributions can in multiples of one hundred rupees.

What is the maximum deposit amount? – a minimum of one thousand rupees shall be deposited in a financial year but the total money deposited in an account on a single occasion or on multiple occasions shall not exceed Rs 1.5 Lakh in a financial year.

Deposits/contributions in an account may be made for fourteen years from the date of opening of the account.

Is there any penalty? – If minimum (Rs 1000 pa) amount is not deposited, the account will be treated as an irregular account. This can be regularized/renewed on payment of Rs 50 per year as penalty. Along with this, the minimum specified subscription for the year (s) of default should be paid.

What is the mode of deposit? – The deposits in Sukanya Samruddhi scheme can be made in the form of Cash or Demand Draft or Cheque. Where deposit is made by cheque or demand draft, the date of encashment of the cheque or demand draft shall be the date of credit to the account. The cheque or DD should be drawn in favour of the postmaster of the concerned post office or the Manager of the concerned bank.The depositor (parents or guardian) has to write the account holder’s name (child’s name) and the account number on the backside of the instrument.

What is the Rate of Interest on Sukanya Samriddhi Account? – The applicable rate of interest on SSA for the financial year 2014-2015 is 9.1%. This is one of the highest rates of interest offered by Government on small savings scheme. (Latest News(18-March-2016): The Govt has cut rate of interest of Sukanya Samriddhi Scheme. The interest rate on Sukanya Samriddhi Account (SSA) for 1st Quarter of Financial Year (FY) 2016-17 would be 8.6%. For complete details on revised interest rates, click here..)

Is interest rate fixed or variable? – The rate of interest is not fixed and will be notified by the central government on a yearly basis.

The account can be transferred anywhere in India if the girl shifts to a place other than the city or locality where the account stands.

Is Premature withdrawal allowed? – 50 % (half of the fund) of the accumulated amount in SSA can be withdrawn for girl’s higher education and marriage after she attains 18 years of age. The account’s balance at the end of preceding financial year is used for the calculation.

Can the girl child operate the account? On attaining age of ten years, the account holder that is the girl child may herself operate the account, however, deposit in the account may be made by the guardian or parents.

Is premature closure allowed? In the event of death of the account holder, the account shall be closed immediately on production of death certificate. the balance at the credit of the account shall be paid along with interest till the month preceding the month of premature closure of the account , to the guardian of the account holder.

The scheme would mature on completion of 21 years from the date of opening of the account, with an option of keeping the account till marriage. So, the maturity of the account is 21 years from the date of opening of account or if the girl gets married before completion of such 21 years (whichever is earlier).

Can the girl child continue the account after her marriage? – The operation of the account shall not be permitted beyond the date of the girl’s marriage.

What are the required documents to open Sukanya Samriddhi Account? – Birth certificate of the girl child has to be produced. The depositor (parents or guardian) has to submit his/her identity and address proofs.

Download Sukanya Samriddhi Account/Yojana (SSA/SSY)Application form. (This SSA applicaiton form that can be submitted at Post office. Download the file by clicking on the below image and go to ‘Form 1’ Post office Savings Bank page and you can take print out of the same)

On opening an account, the depositor shall be given a pass book. It will have date of birth of the girl child, date of opening of account, account number, name and address of the account holder and the initial amount deposited. The depositor has to present the passbook to the post office or bank at the time of depositing/receiving the interest/on maturity.

Income Tax Benefits on Sukanya Samriddhi Account Scheme – Section 80c

The amount that is deposited under Sukanya Samriddhi Account will be eligible for income tax exemption under Section 80C of Income Tax Act, 1961.

At present, only the contribution of up to Rs 1.5 lakh toward Sukanya Samridhi Yojana is eligible for tax deduction under Section 80C. The maturity amount (withdrawal amount) is exempted from income tax. But discussions are on to also exempt the interest income. We can expect a formal announcement on this in the coming Union Budget 2015-16.

(Issue of making interest income exempt from taxation can be done by Department of Revenue (DoR) through legislative amendments. The matter is under examination of DoR)

Latest News : As per Budget 2015, all the payments under Sukanya Samriddhi Account / Yojana Deposit Scheme are exempted from Income Tax. So, Deposits made under SSA Khata / account are exempted under Section 80C. The interest amount and maturity amount (withdrawals) are also exempted from Income Tax. So, investments in SSA falls under Exempt – Exempt – Exempt (EEE) tax category.

PPF Account (Public Provident Fund) Vs Sukanya Samriddhi Account

PPF (Public Provident Fund) has E-E-E tax rule. As per this rule – contributions, accumulation (interest amount) and withdrawal are all exempted from income tax. There is a high chance that Sukanya Samruddhi Account may be brought under E-E-E catergory(As of now there is no official confirmation on this. Let us wait for more information).

For the fiscal year 2014-2015 the rate of interest on PPF account is 8.70% (upto March 2015). On Sukanya Samruddhi Account this is 9.10%. So, comparatively SSA has higher rate of interest. The interest on SSA will be calculated just like the way it is done on PPF a/c.

You may have few questions like : How is the interest amount calculated on Sukanya Samridhi Savings scheme? – What could be the total maturity amount on SSA Savings account? What is the total interest amount that I can earn on SSA?

Before proceeding with the calculations, below are the main points/assumptions with respect to interest and maturity amount calculations:

The contributions are allowed upto 14 years from SSA account opening date.

The SSA savings account can be operated till the completion of 21 years from the account opening date.

The current applicable interest rate on SSA scheme is 9.1% (this rate of interest will vary in future, as per the Central Government’s future notifications.)

The interest on SSA will be calculated just like the way it is done on PPF a/c. (PPF interest is calculated monthly on the lowest balance between the end of the 5th day and last day of month, however the total interest in the year is added back to PPF only at the year-end.)

I have assumed the investments are done at the beginning of every month/year and calender year as April-March.

Example 1 – Mr Aravind Swamy wants to open the Sukanya Samridhi Savings account in the name of his girl’s child (5 years old) in April 2015. He wants to contribute Rs 10,000 every month for 14 years. He also wants to keep this account active till 21 years from the account opening date (or till Child’s age of 25 years). He wants to know, what could be the total approximate interest amount and total maturity amount that he would accumulate under SSA?

As per above calculations, Mr Aravind Swamy can accumulate total interest amount to the tune of Rs 45.73 Lakh. The total maturity amount on his SSA savings account can be Rs 62.53 Lakh. He also has the option to withdraw 50% of Rs29.89 Lakh when his child turns 18 years. (If he withdraws, the total maturity amount will not be as shown above.)

Example 2 – Mr Madhavan wants to open the Sukanya Samridhi Savings account in the name of his girl’s child (5 years old) in April 2015. He wants to contribute Rs 1,20,000 every year for 14 years. He also wants to keep this account active till 21 years from the account opening date (or till Child’s age of 25 years). He wants to know, what could be the total approximate interest amount and total maturity amount that he would accumulate under SSA?

As per the above calculations, Mr Madhavan can accumulate total interest amount to the tune of Rs 46.32 Lakh. The total maturity amount on his SSA savings account can be Rs 63.12 Lakh. He also has the option to withdraw 50% of Rs 30.24 Lakh when his child turns 18 years. (If he withdraws, the total maturity amount will not be as shown above.)

Kindly note the difference in the maturity amounts between the ‘monthly contribution account’ and ‘yearly contribution account.’

My opinion on Sukanya Samriddhi Account Savings Scheme:

I can confidently say that the average rate of education inflation in India is somewhere around 10% to 15%. The rate at which marriage expenses are increasing is also very high.

Given this scenario, the 9.10% rate of interest may not beat the inflation. Unlike Bank fixed deposits, this rate of interest is not fixed.

The better way to create sufficient corpus for a Child’s education is to allocate major portion of savings to equity related instruments (if you have more than 10 years time frame). You can then consider investing small portion of your savings towards this scheme. This scheme can be considered as the DEBT component of your investment portfolio.

Another drawback of SSA is the number of accounts that can be operated. The number of accounts that are allowed to open under this scheme is limited to two accounts only. Parents of more than two girls can not open multiple Sukanya Samriddhi Accounts.

Sreekanth Reddy

Sreekanth is the Man behind ReLakhs.com. He is an Independent Certified Financial Planner (CFP), engaged in blogging, financial counseling & property consultancy for the last 6 years through his firm ReLakhs Financial Services . He is not associated with any Financial product / service provider.
The main aim of his blog is to "help investors take informed financial decisions."

Comments

Lalit Sehgalsays:

December 5, 2016 at 10:55 am

Hi Concerned

While I have read all details provided by you I am still little confused & would request you to please help answer my query as below:

If I have opened SSA for my daughter in year 2015 who was 10 years old at the time of opening account; her account will get mature when she is 21 years old (i.e 11 years from 2015) or her account is matured after 21 years from the date of opening of account

sir if girl entered in 10 years on oct2016, will she eligible for this scheme? Kindly give clear details on that attain age. I read SSA scheme but i want to know above mentioned age(Now entered in 10 years not completed).

Dear parveen ..SA can be opened in the name of a girl child from the birth of the girl child till she attains the age of ten years. The scheme would mature on completion of 21 years from the date of opening of the account, with an option of keeping the account till marriage. So, the maturity of the account is 21 years from the date of opening of account or if the girl gets married before completion of such 21 years (whichever is earlier).

Respected sreekanth reddy garu
My name is P.Nanaji I have two girl child 1st girl P.Surekha Dob 09/07/2004(12yrs)
2nd girl P.Amrutha varshini Dob 03/01/2008(9yrs) this girl(2nd) already open SSA But 1st girl child not open SSA because her age 12yers sir is there any opportunity to open SSA for 1sd girl child plzzz reply to me sir thank you

Dear Rajeshwari ..In case if you are NRIs then you may not be eligible to invest in this scheme.
Girl’s age should be below 10 years and the contribution of minimum Rs 1,000 can be made every year for 14 years (from the date of account opening).

Sir, Iwant to depisit 1 lakh per year in ssy. But in irregular intervals. One time 1000,another time 60,00; And payment maynot be every month. But in total 1lakh.How does is effect in getting interest and penalty ckass?

Dear Rajeshwari,
Under SSA, the interest is compounded on yearly basis. The interest amount is calculated for the calendar month on the lowest balance in an Account on the deposits made between the close of the tenth day and the end of the month. So, it is now clear that no interest is paid on deposits made after 10th of the month for that specific month.

Hi Sreekanth, thanks for great information! Our daughter was born in the US and is therefore US citizen. We are however now in India and are Indian citizens. Is our daughter eligible for this scheme since we would be the one to invest for her?

I have One Message from My Friend is a – State Bank of India have a Sukanya Yojana f0r 01 to 10 years Girls, Every year we put the 1000/- up to continues 14 years means 14×1000=14000.00 after girl age of 21, we will receive 6,00,000.00??

My niece age is 9 years. We want to open SSA. If we open an account under this scheme, is it necessary to deposit full 14 yeras. Then her age will be 23 yers. Can i withdraw the amount at 21 years or shall have to wait for more?

Dear Subhransu,
The minimum deposit of Rs 1,000 has to be deposited till the time the account is active (for 14 years). The account can be operated till 21 years from the date of opening of account.
Partial withdrawal of 50% can be made when girl child attains 18 years of age for pursuing higher education.
Kindly read: Latest amendments to SSA scheme.

I have One Message from My Friend is a – State Bank of India have a Sukanya Yojana f0r 01 to 10 years Girls, Every year we put the 1000/- up to continues 14 years means 14×1000=14000.00 after girl age of 21, we will receive 6,00,000.00??

D/Sir , I wants to open ssa for my two girl childs (09 yrs and 12 yrs.) with one time payment of 1 lack each.is it possible?if yes then what will be the rate of interest and can i get income tax exemption under 80 c for fy 2016-17

Dear Alok,
The applicable interest rate for 1st Quarter of 2016-17 is 8.6%.
One can deposit maximum Rs 1.5 Lakh per one SSA account. So, you can deposit Rs 3 Lakh but you can claim up to Rs 1.5 Lakh as tax deduction under section 80c.

Last year i opened an sukanya account & at that time they told me the interest rate around 9.1% anually. But i got around 3.3% of interest.I went to post office to know the reason they didn’t replied any satisfactory answer. So, My concern is that is the interest rate i got is right or there is some issue in it. And if yes than whom should i contact for it???

Hi , Gud Morning , i blessed with a baby girl in the month of Oct 2015 , can we start deposit in this Scheme plz clarify me and if a deposit Rs 1 Lack per year wat is the maturity amount at the age of 21 plz guide me.,

Out of love Grandmother (who gets pension, saves 2000 INR per year) woud like to open a SSA for her granddaughter who is 8 years old (A foreign citizen-foreign passport holder with PIO–person of indian origin card). Is it possible or correct to do so?

Hello Shrikant,
I have opened a SSA account for my daughter in June 2015 but since last 3-4 months I have not deposited money as I have lost the pass book due to shifting to another house.
Shreekant let me know what to do now?

Dear Shaheen,
It is ok even if you do not deposit every month, it is not mandatory. The minimum deposit is Rs 1,000 per year.
Suggest you to kindly approach your post office / bank branch and apply for a new passbook.

Dear Sreekanth,
in case there is a death of a person who is responsible for the installments to be paid of an account holder under the SSS yojana and there’s a very little expectation from anybody to pay for same
then will the scheme end incomplete in that situation
can the account holder withdraw the balance
there’s no any undertaking on governments side

I herein would like to state that I had opened an saving account date 18/3/15 (A/c no- 331000*** Bhawna Tomar) of my daughter in post office in Mullanpur, Garibdas, Punjab. Now as I have been transfered to Bhandoli, Palwal, Haryana,I applied to transfer the same account to Bhandoli Palwal from Mullanpur on 4/8/2015 but till date it has not been done. I have taken up the matter with all officials who are in cc of this email (Trailing mails are attached), but unfortunately nothing has been done, I herein in request you to please look into the matter and sought out at earliest. Also please take strict action against all culprit officials who are involved in the act.

Dear Arun,
Kindly do not share your bank account details in public forums. Do note that this blog is for information purposes only and we cannot help you in resolving your query. You may transfer the account to bank. That would be a better option.

Good day sir .
My name is Naresh Arora , i have a quick question , my daughter she is 10 years ,& we had open an SSA a/ c on 10/04/2015 & we are planning to deposit 10000 rs every month now she is 10.can you pls help me when she will be 24 how much she will get because we have to pay till 14 years according to SSA.can you pls send me the chart so i can see.
It would be kindly request if you do this needful.
Thanks & best regards
Naresh arora.

Hi Sreekanth Reddy,
I have 2 questions regarding the SSA.
1. We are currently in USA, but my kids(2 daughters) were born in India. Am I eligible to open the SSA account without physically present in India? If yes, please let us know the procedure.
2. As the SSA matures after 21 years, will we be able to get the amount IF WE BECOME USA CITIZENS BY THEN?

I have enrolled my 5-year-old daughter for Sukanya samrudhi a/c as D/O…..with my wife name&given my wife PAN# in parent details and I am paying 1,000/month. Can i show this as my investment to incometax, because my wife is housewife and I am the one doing job.

Nice article. In fact I was looking for the interest calculation of this scheme. I believed that investing on monthly basis (between 1st and 5th day of each month) would give best returns and so I am operating my PPF and SSA in that way.
But seeing this article, it seems Yearly contribution yields better returns. So, 2 questions:
1. On which DD/MM of each year should I invest on an Yearly basis?
2. Does this benefit stand true for PPF also? If Yes, I will switch to Yearly investment.

Dear srekanth appreciating your work …. my daughter is 4 yrs old , i want to open a SSA on her name but unfortunately there is printer problem in the branch of SBI … so they are unable to provide me a SSA form …. the forms i found online looked like for post office use only as all terms related to post offices were written on those forms …. i request you to kindly provide me a valid form which can be used in SBI

I have already opened SSA account for my daughter last year march in post office.
Can i shift SSA account to SBI bank ? if yes what is the procedure and documents required ?
Can i deposit amount online for SSA ?

October 9th 2015 ? are you serious ? today is 25 sept 2015
and even for single parent their must a biological father you can mention her name
and third blog is to discuses financial planing and related topic not to tell peoples how to get DOB for single parent

Hi
We live in Canada.My daughter is a Indian citizen now.She is on permanent residence status.but she will become a Canadian citizen After 3years.she is now 8years old now.Is my daughter eligible for Sukanya Samriddhi?

Account can be opened for any girl child in India who has not yet attained an age of 10 years. Since the plan has been recently launched, there is certainly a relaxation of one year for girls who have attained an age of ten year by 01st December 2014 ie girls born on or after 02.12.2003, only in case if their account is opened by 01st December 2015.

Hi Sreekanth,
I am thinking to open sukanya samriddi account during this Dec. Will be able to deposit 1,20,000 on yearly basis, will this totral amount be tax exempted for the year 2015-2016 else only a portion of it will be eligible for tax exemption as per pro rata basis as I am depositing in the month of Dec 2015.Kindly guide me.

My grand daughter born in Dubai (UAE). Weather I can open a/c in Sukanya Samridhi Yogna in her name? Am I her legal guardian? What is the definition of Legal Guardian? My son is working in Dubai since last 10 Years. Her birth certificate is issued by Indian Consulate Office in Dubai. Please give me guidance in this regard.

Dear Jesin,
Generally these type of Small savings schemes are not applicable for NRIs. However the govt gazette on SSA is not very clear on this. Kindly contact your banker on this.List of banks for opening SSA.

Dear Suresh,
You can contribute to SSA account for 14 years from the date of account opening.
In case of any unfortunate event happening, the account holder (child) can continue the SSA account and withdraw money for her education or marriage.

Dear sir
In case of a girl child who is of nine years and nine months old, if her father wants to open SSA but if he dies before 14years of keeping that account operative, will the account be kept operative by government by way of depositing monthly deposit as made earlier and all benefits given to that girl child as if her father is alive?

My second question is will the maturity amount be given only to the hand of girl child in whose name the account exists or to the father who opened SSA on girl child’s name?

My daughter is 20 months old. Before one year I opened her ppf account in sbi. Now I want to open ssa account but sbi refused.&said noone can open more than one ppf account how can l open ssa account
Because ppf can’t be closed. Can I convert it to ssa account.

Sir, My daughter D O B 13/12/2013 my question is in case me the earning person not for other than after 2 or 5 year me death no any body pay the amount to deposit this condition what is rule of govt. to pay the money or refund of my amount which type kindly suggest

SIR, DOB OF MY DAUGHTER IS 17/06/2008. I HAVE ALREADY OPENED A SSA IN HER NAME. PLEASE SEND ME A EXL CALCULATOR FOR CALCULATING MATURITY VALUE AT 21 YEARS AFTER DEPOSITING RS. 12500 MONTHLY , UPTO HER 14 YEARS OF AGE.

In furtherence to my posting on May 16, 2015, I would like to know further details. If I invest every month Rs.5000/- then amount I am going to invest for 14 years is Rs. 8,40,000/- . As earlier said my daughter age is 9 years. After investing 14 years (my daughter age will be around 23 after 14 years), can I withdraw full amount at the age of my daughter attaining the age of 23 years? and how much I will get?

Dear Raghavendra,
You can deposit for the next 14 years and the account can be kept active for the next 21 years (from the date of account opening).
Kindly download the calculator from this link – Click here.

Dear Sir,
My daughter birth date is 15.7.2006. ( Now she is at the age of 8 yrs & 9 months). If I open a SSA account for her, can I withdraw ALL THE AMOUNT from the account before the marriage, if I plan to conduct marriage at the age of 24 yrs

We are opening a SSA account in name of our daughter who was born on 25/10/2010.the amount would be 1000 per month.can you plz assist me wht will be the amount i will get after she is 18 year or 21 year.and can we withdraw money in between if required.

If I deposit 5000 a year then when will be the total amount after 18 and 21 year.
If you don’t mind please send me the SSA calculator in exl format. Your help would be highly appreciated.
Thanks
Vijay pandit

I read in your post that the SSA account even if it is opened in a post office later on it can be transfered to our preferred bank. Please clarify what shall I do to transfer it from post office to my bank. I have already opened it in a PO

Cons of Sukanya Samriddhi Yojana
1. High Lock in Period
2. Limitation on number of Account
3. Scheme do not provide for online transfer of Amount in this account. It allows only payment by Cash, Cheque and Demand Draft.
4. No Clarity on Future Interest Rate for this account.

Hello Sir,
i want deposit some fund in SSA monthly(4k) basis kindly provide me calculation format in excl, with interest rate of 9.2% kindly help so i can deposit with help of chart. How many years i need to pay ? and how much amount i will get it After 18 years?

Dear sir, iam plan to deposit SSA scheme but my child age is 9 years. I plan to deposit Rs.1000/- per month. When is maturity period (When child turns 21 years age (or) 21 years from the date of opening). In case 21 years from the date of opening (my child turns 30 years). I planed to marriage for my child at 2o years age. Account will be close at the time of marriage. Kindly guide me

Presently I am depositing some amount in the Canara champ account of canara bank, please suggest whetehr to continue in the same mode or to start savings in sukanya scheme, if yes in sukanya scheme please provide me the calculator

i have a daughter of age 1 year 6 month if i will deposit 60000 every year in every month of april
how much i will get at 21 years.
is it beneficial to deposit amount 60000 in one installment or there is no benefit
it is same as deposit amount 5000 per month

Good noon sir,
I am glad to read most of the queiries and your reply. You have replied most of the queries. my query has solved from the others queries n reply. i think you cn give the option only to calculate the interest so everybody can count it there own. Thank you.

Dear sir,
My daughter dob is 22/7/2013 ,sir I. Am fonfuced I have to deposit monthly or yearly if monthly thn how much the amount and if yearly thn how much the amt and at the time of maturity how much we can get pls send me the chart and can I open the a/c in SBH bank pls reply me sir

I have a Daughter.
Birth day 02.02.2012.
I CAN START THIS ACCOUNT THIS MONTH.
I Can Deposit 1000-1500/- Per Month.
i can deposit starting time 1500.
How Much Met Me After 19 Years?
Please Give Me Chart Of Year By Year,

sir Plz send me calculator (exl Sheet) i want deposit some fund in ssa monthly basis kindly provide me calculation format in exl, with intrest rate of 9.2% kindly help so i can deposit with help of chart

My daughter’s DOB is 26.07.2005 , if suppose I start SSA this month by investing Rs. 5,000 per month. In which year I can withdraw 50% for my daughter higher education and the full maturity will also come in which year or it is related to the marriage only. The day my daughter get’s married she can claim the maturity.

Dear Shiv Kumar,
Your daughter can withdraw 50% of accumulated fund value after attaining 18 years of age. The full maturity amount can be withdrawn after the completion of 21 years (from account opening date) or after your daughter’s marriage.

Dear Mr. Reddy-
My daughter is just 3 month old, please advise about choosing this SSA scheme is best for me in compare to LIC and other life/children plan? part of this is interest after maturity also tax free under this scheme? is this scheme available in corporation bank as my corporation bank manager denied for this scheme.

i wanted to invest for my daughter, but know people are saying it is not good to invest in this scheme, better off to invest in RD or FD or LIC new policy, i am little confused can you please help me on this and also if you can mail me the calculator it would be great.

Dear Lakshmi,
Suggest you to first calculate the required amount of savings that you need to do for securing your Kids’ future. Read my article “Calculate how much you need to save for your kid’s future“.
Out of SSA / RD / FD / LIC plan – I would prefer to invest in SSA.
But, do not invest your entire savings in this scheme alone.

I have twin daugters, dob is 11/12/2013. I am planning to apply for SSA scheme. Plz clarify below queries.

1) Is it good time to open an account before 10th of april 2015? if yes, what is the advantage. if No, what is the disadvantage.
2) Can me and my wife be a depositor for each child respectively? Will it be tax benificiery for us?
3) What is the benifit/advantage if i pay 1.2lakhs annally viz-a-viz paying 12,000 every month.
4) Can you plz share excel format for calculation which helps me better to plan how much to deposit on each kid?

Dear Jayavardhan,
1 – If you open at the beginning of the month/financial year, you get full year interest rate.
2 – Yes, you can open. Both of you can avail the tax benefits.
3 – If you deposit the amount in the beginning of the year, you will get higher interest amount when compared to monthly deposits.
4 – Emailed the calculator.

Hi,
I’m visiting india for short term trip, would like to open SSA for my daughter.
Is the worth plan for saving money?
Becos interest rate is fixed for all 21 years right?
then its like another PPF like product..no use i think..based on Inflation rate in India now…
Please reply.

Dear Srinvass,
If your investment objective is to get higher returns (over and above the inflation rate) then you may ignore this scheme.
Interest rate is not fixed, it may vary, but i believe it can be in the range of 8% to 9.5%.

I take a Child Plan of Union Dai Chi (a joint venture of Union bank of India & Bank of India) of 5.00 Lacs Sum assured amount. please guide me about this child plan is better or not, please suggest me another child plan for my children. I have to children, one daughter of 7 years old and one son 2 years old. please guide me about the plan which protech their life, educaiton and marriage purpose. I shall be highly obliged to you

Sir If suppose i open ssa 2015-16 with 1000 rupees in month april then next month i deposite 5000 rupees in may then next month 2000 rupees deposite june then next month 1500 deposite in july then i deposite different amount to march 2016, suppose i deposite 25000 in total in financial year. Then please clarify, that how much ruppes on interests will be allow and how much gross rupees give me on financial year 2015-16.

Dear Manohar,
Financial year (April to March) is considered.
You may receive around Rs 78 Lakhs after 21 years from now.
The year end balance after 12 years from now can be around Rs 30 Lakh. You may withdraw 50% of this fund.

Could you please explain why there is difference in Scenario1 and Scenario2 interest amt though the contribution is same ?
How actually it is calculated? For yearly i am clear. Explain more on monthly contribution.

Dear Aruna,
If you deposit the amounts every month, the interest is calculated on previous month end balance.
Whereas if you deposit in the beginning of a year (yearly mode), interest rate is applicable for the entire year right.

my daughter is 10 years old . if i deposited 12000 yearly. how much money i recieve when i need money for my daughter marriege purpose. suppoose my daughter got married on 2025. my accound will mature as my daughter got married.

Could you please explain why there is difference in Interest calculation for “Scenario 1-Monthly Deposit and Scenario 2-Yearly Deposit”, though the total contribution is same? Thanks in advance!!
And i would say this is great scheme with proper explaination.

dear Sir, My Daughter is 5 year old. if i will open account with 2000/per month for 14 years how much i will get back at completion 0f 18 years of my daughter (it will returned with 50% of deposited + interest?) and also at 21 years? if i withdrawal at 18 years for marriage purpose is account will closed?

Dear Solanki,
When your kid attains 18 years of age, you can withdraw 50% of Rs 5.5 Lakh (yes, interest is included).
When you kid attains 21 years (16 years from now) the balance in the account can be around Rs 7.5 Lakh. The account can not be operated after the marriage.
If you close the account after 21 years from account opening date, you may receive around Rs 12 Lakh.

Hello Sir,
My doubt is ,how many payments can be paid in a month ,is there is a way to pay the amount of Rs .100 in 10 dues in a month is it is possible to pay in this way or monthly once could be payment is allowed .please reply in my mail because i cannot pay Rs 1000 in single payment but i want save 12,000 per anum for my child future due to my family poor condition.
Regards DEEPA SENTHILKUMAR

sir,
the dob of my daughter is 12/02/2009.
1.till which date ,i have to deposit?
2. on which date will be the matured?
3. if 1000/- per month will be deposited ,then what will be the approximately mature value ?
4. on attaining age of 18(eighteen), what amount can be withdrawn ?

MY CHILD IS 6 YEARS OLD.IF I DEPOSIT 12000 IN EVERY YEAR .WHAT IS MY MATURITY AMOUNT AT THE AGE OF MY DAUGHTER 21 YEAR ie in 2030.shall i can close my account and get the full maturity amount for my childs marriage purpose??OR IS MY ACCOUNT CAN BE CLOSED ONLY AFTER MY CHILDS MARRIAGE??

Dear Baiju,
The account balance can be around Rs 3.7 Lakh (in 15 years from now).
The account has to be closed after the kid’s marriage.
You may withdraw 50% of account balance when your kid attains 18 years.

1)I have opened SSYA for my daughter in mar-2015 and paid maximum amount (1.50L). So i can pay for next financial year apr-2015 to mar-2016 financial year from Apr-2015 (1.50L =Rs.12500*12months).
2)One more clarification : We have to pay for 14 years ie mar2015+14 years = mar 2029 (maximum amt 1.50L for the financial year)or i can also pay upto dec- 2029(1.50L for the financial year)
3)After the child got married , she can close her account after end of financial year so she can get interest or account should be closed immediately.

Dear Subha,
1 – Yes, you can contribute deposits of Rs 12500 * 12
2 – I believe that you can contribute to SSA, till completion of fourteen years from the date of opening of the account. So, it will be upto Mar 2029.
3 – The account has to be closed after she gets married. The operation of the account shall not be permitted beyond the date of her marriage

Dear shrikantha,
My wife wants to open account and acts as a depositor for the child with DOB 07-12-12 with a year contribution of 12000/-.what will be the approx calculation if i consider this year rate of interest ? to claim 8oc tax benefit i should produce my daughter name OR my wife name ?

Dear Sreekanth,
I think the total calculation is on some assumption but it is not sure that we will definitely get the amount as indicated in the table. It’s not like fixed deposit it’s like mutual fund. The interest rate may increase or decrease depending upon the economic growth. I am not satisfied with the scheme as it is not at all giving confirmation exactly what amount we will get?
any way thanks for providing the information.

You can download the SSA calculator and check how much your maturity amount will be. But don’t go by that way as these are not actual returns. Interest rate will be changed yearly, so it is not possible to know about the maturity amount. If you have a girl child and you want a decent return without taking any risk, I think you can go ahead.

Dear Santanu,
Thank you for your inputs.
Yes, all the calculations (interest & maturity amounts) are all based on certain assumptions. I request all the readers to understand these assumptions (mentioned in the article).

Dear Sir,
MY DAUGHTER DOB is 19 OCT.2013. I WANT TO DEPOSIT Rs.1000 OR 1500 OR 2000 PER MONTH. HOW MUCH I WILL GET ON MATURITY ? PLEASE SEND ME ON THE EXCEL FORMAT ON MY E MAIL ID.
THANKS & REGARDS
BIRENDER SINGH

Good afternoon sir.
I have two daughter. 1st is DOB 31/01/2011. And 2nd is DOB 12/12/2014. I have open two account or one account ? I can pay 50,000 Rs per year each. So after 21 years how much I will get ? Thanks Alok.

Dear Allen,
Yes, interest rate may vary from year to year.
I believe that may be the case with all the fixed income securities like Bank Fixed Deposits, PPF, RDs etc.,
Kindly note that this is not an insurance scheme, no sum assured is available.

1) First can i open account to my elder brother daughter has a guardian?
2) Second within this month i will deposit 120000 lakh, then they will calculate/give the yearly interest (above said 10000 rupees)
3) I’m physically challenged so any other facilities is available?

My Child is 7 years old. I want to Invest 1000/- Rs per month. So pls advice me to” how much amount i will get in after 18 years completion of my child”. and (how much amount get after 21 years of completion of policy).

This is really a good savings for a girl child. so that parents can get relief (up to some extent) from the financial worries for the higher education and of course marriage also.
I have a 6 years old girl child and wants open this SSA account I can deposite 25,000pa. so will you please tell me what is the maturity amount?

Dear Prakash,
“Up to some extent” is the key here. One should not put his/her entire savings in this scheme. A portion of the savings can be invested in this scheme towards girl child’s education. I strongly believe one needs to opt for other investments too (like mutual funds) to accumulate sufficient corpus for kid’s higher education or to meet marriage expenses.

Dear Sandhya,
I too have this doubt. As of now, I do not have the answer.
I don’t think post offices or banks have infrastructure in place to track multiple accounts (as of now). We need to wait for few more days/months to get clarity on this topic.
By the by, did you open two accounts?

Dear Anurg,
Small Savings Schemes like SSA & PPF (public Provident Fund), post office deposits, bank deposits, NSC (national savings certificates), KVP (Kisan vikas patra certificates) etc., are fixed income (safe) debt-oriented securities.
For long-term goals like Kid’s higher education, I suggest you to consider investing a major portion of your savings in equity mutual funds and a small portion of your savings can be invested in either PPF or SSA (if you have a girl child).

I am planning to open the account, Can you please confirm me the amount which we are paying is TAX benifit. Only Parent and guardian can open the account in the name of child, what about the next installment any one can go and pay the amount on behalf of parent/guardian?

Dear, I am an NRE (Non Resident Expatriate) residing in Saudi Arabia. I would like to know some details about SSY.

What I need to know is, can my wife’s parents open this account for my daughter with all the documents of my daughter and of me or my wife?
As they mentioned Rs1.50 lakhs is the maximum which can be deposited in a year, is it a calendar year or a financial year which is ending in March?
Is it is okay that I can deposit whatever I like during the year in the multiples of Rs1000 or above up to the allowed limit of Rs1.50 lakhs?
Even though it is mentioned that this Scheme can be opened in Nationalised Banks, none of the Banks in Kerala (where I have enquired) are ready for this. Is there is any Bank in your knowledge in Kerala (Kollam District) where this is possible? Or only in Post Offices as of now? Actually, if possible, I would like to deposit before the end of the Financial Year.

Dear Girish,
I believe that the depositor (parent) signature is mandatory. (So, I do not have right answer to your question).
Rs1.5 Lakh per Financial Year.
Yes, the initial deposit is Rs 1000/-, after that you can deposit in multiples of hundred, upto Rs 1.5 Lakh (max).
Most of the banks are not yet ready with necessary infrastructure (software) to open SS Accounts. Kindly enquire in nearest Post office branch or State Bank of India (Main branch in your locality).

I think scheme is better than Insurance schemes like endowment / money back or even child education schemes were the rate of return is 6-8%. This scheme can give a better corpus and avenue for investment.

res. sir
my ques. is about interest rate, now it is 9.1 but it can decrease or increase as per govt. rules as above saying.
so how can we calculate the net ammount of saving after 21 years. please clarify my daubt.
thanks

Sir, if I want to deposit 3000 per month in this scheme how much money can be achieve by me at the time of maturity and also clarify that after 21 year can the parents claim for above or the child only? Please send a month wise deposit plan chart on my I emlil id. Thank a lot for this sir

i have a doubt in Interest Amount calculation.
10000 (monthly contribution)
120000(yearly contribution)
9.1% interest
then interest amount would be 10920 (=120000*9.1%)
BUT per the sheet it is 6083 .. what is that calculation? sorry if i am wrong…

I feel that interest amount of Rs 6083 is correct since amount of Rs 10,000 is deposited every month and interest is being calculated on the amount added.
If amount of Rs 1,20000 is deposited at once at the start of financial year ie 1 April, then interest would have been calculated on this and it would be Rs 10,920

Dear Rashtrapathy,
In monthly contribution, you deposit 10000 * 12 months, interest is calculated on the previous month end balance.
In yearly contribution, you deposit today, and interest rate is applicable for the entire 12 months.

Sukanaya Samriddhi Yozna is very helpful scheme for us. M having two daughters one is 7 yrs and 2nd is 4 years are old. I want to know if I deposit 1000 Rs.each for my both girls then how much amount i will get after maturity. one more thing that it should be fixed amount I have to deposited or i can deposit as per my convenience means initially I opened the account with 1000 Rs. after two month can i deposit 2000 again in next month i deposit 1000. Please clear it. waiting in your reply. can u send me illustration to calculate the maturity amount depends on deposited amount

I have a Daughter.
Birth day 04.10.2013.
I CAN START THIS ACCOUNT THIS MONTH.
I Can Deposit 3000-5000/- Per Year.
i can deposit starting time 1500.
How Much Met Me After 19 Years?
Please Give Me Chart Of Year By Year,

Dear Velumurugan,
Yes you can open two accounts on your kids’ names.
The minimum deposit is Rs 1000 per year and the maximum is Rs 1.5 Lakh. You can contribute to two accounts but the maximum tax deduction that you can claim under
section 80c is Rs 1.5 Lakh only.

Dear sir
My daughter is 7 years old. Im planning to deposit per month 1000 rupees in that account. I need to know minimum how many years i have to deposit and how much amount i will be getting back at the end and in which year.

Dear Sir,
I Want To Know That My Daughter Birth Date 28/6/2005,
I Can Open This Account?
If Yes,
I Can Deposit 2000/- Per Year.
How Much Met Me After 14 Years?
Please Give Me Chart Of Year By Year,
Thank You Sir.

Actually i want to know that my daughter born on 30th July 2015 and now we can open an account called sukanya samriddhi, if we open an account for her , iam ready to pay 12k yearly how much amount shall we get after 21 years .

Dear Sir,
I Want To Know That My Daughter Birth Date 28/02/2004,
I Can Open This Account?
If Yes,
I Can Deposit 1000/- Per month
How Much Met Me After 15 Years?
Please Give Me Chart Of Year By Year,
Thank You Sir.

Thanks for posting this information.
Just wanted to know how beneficial this plan is as compared to PPF ? Other than the locking period
Can this be trusted like PPF ?

what does this mean, can you elaborate more on this point which you mentioned ?
The present value (PV) of Rs 62.53 Lakh (maturity amount ) is Rs 8.45 Lakh, assuming 10% as Education inflation.
Should I understand this in a such a way that, the value of 62.53Lakhs after 15-18yrs would be just 8.45laks due to inflation ? Correct me if im wrong.

I would really appreciate if you could answer these questions.
Regards
Guru

Dear Guru,
My personal opinion is, PPF is still a better choice. You have loan option & partial withdrawal facility after 6 years is also available.
Also, the interest rate differential between PPF & SSA, which is there now, may not be the same in future.

Regarding Present value calculation – If current education cost is Rs 8.45 Lakh (higher education), the same may cost you Rs 62.53 Lakh after 15 years (due to rise in prices / inflation)

You are right Shree, PPF is far better as we can operate the account online, make recurring payment regularly. But I think we can’t compare SSA and PPF on these factors, as SSA will mainly target those people who are under-privileged. From their need point of view I think SSA has an edge.

Dear Guruprasad,
Very good question.
No where in Govt gazette it is mentioned Depositor(s). I believe joint contribution may not be allowed.
Kindly check with your bank or nearest post office staff. Do leave your comment here (if you get answer from them).

Dear Pradeep,
Budget 2015 made it very clear about the tax benefits that are applicable to investments made in SSA.
The contributions (deposits) are eligible for tax deductions (upto Rs 1.5 Lakh) under Section 80C.
All the payments (interest amount and maturity amount) are also tax free.

hi sreekanth,
i have a daughter, 7 years old.
DOB:09.09.2007.
I have an idea to invest in SSA.
i have a doubt whether the deposit has to be made compulsarily for 14 years from date of opening or deposit can be made till my daughter is 14 years old.
i have a plan to invest only for nearly 5 years.

Dear Anu,
The contributions have to be made for 14 years, from the date of account opening.
If you are unable to make high value deposits, suggest you to contribute just Rs1000 per year (minimum contribution amount), after the initial 5 years.

Dear Vikram,
Good to know that you have bought a term insurance plan. Suggest you to analyze if you are under-insured? Calculate the required insurance amount based on your expenses, financial liabilities, financial obligations etc.,

My daughter dob is 24 sep 2004. I want to invest 5000 p/m. Up to what age I have to invest and what amount will I get at what age. Pls don’t tell 14 years and 21 years. Pls tell as per age of my child.

Dear Pradeep,
14 years and 21 years thing is dependent on the account opening date.
If you open account in April 2015, you can make contributions for 14 years from account opening date ie till 2019.
You can operate the account till 2036. (If your child gets married before this date, account has to be closed).

The approx maturity amount will be Rs 30 Lakhs. When you child attains 18 (in 2022) the balance will be around Rs 21 Lakh.

Very nice article.
I am sneha, my question is;
I am a house wife and planning to open ssa or ppf account on my daughter name,who is 3 yrs old now. My husband works overseas,and he is the source of income,who is sending money for ssa or ppf..
So after maturity of the account what form i have to submit for tax savings? As i am not earning money.
Tnx in advance.

Dear Shashikala,
You can open the accounts by visiting a post office branch or banks like SBI. You have to submit a copy of Kid(s) birth certificate, your ID & residence proofs and filled SSA application form.

thanks for the nice post, i have 02 questions, my daughter is now 10 months old, i can invest 50k /year, what you suggest ,this yojna is better or else any other plan you can suggest me.
2) if i invest 50k/year what will be the maturity amount, considering the current rate of interest.

Dear Ajay,
If you are planning to invest for your Kid’s Higher Education goal, suggest you to first consider investing in Equity Mutual Funds. You have around 16 years from now for your child to go to college. A small portion of your savings can be invested in either PPF or this scheme.

Mera ek question hai sir kya hum 1st year 36000 deposite karte hai or second year 25000, means every can we deposite different, different amounts ??? Or we have to deposite fix amount, which we decided on account opening time.

I have a doubt, this scheme says The contributions are allowed upto 14 years from SSA account opening date. But if marriage of a girl child occurs before 14 years (let’s say anyone starts this scheme at the age of 9 yrs of girl child and after 13 years at the age of 22 years she will be married) then in this case anyone will pay till 13 years only. So is it allowed??

Nice and very informative post, I have got a question , I am planning to invest in my daughters name and my wife will be claiming exemption for the same. In future if my wife does not claim , can I deposit and claim exemption.

Dear Mohan,
If you are the contributor, how can your wife claim the tax exemption?
I am not very sure regarding your second query. I believe, new guardian/depositor is allowed only if there unfortunate event happens.

By when you are expected to get clarity on tax (E-E-E)? Unless this scheme is not E-E-E, it is not advisable since PPF gives better yield.
Secondly, which banks have got mandate for this scheme? There is no public listing of designated bank branch available on net.
Thirdly, what treatment will be given on maturity? Since the corpus will be made available in child’s name while the investment will be in parent’s books of account? Does this mean that at the time of maturity, parent need to show as gift? if yes, it will attract gift tax.
Lastly, is the interest calculation on monthly closing balance or daily balance?

Thanks for sharing knowledge. And information is articulated very well.

Dear Mitul,
Very good questions.
As of now, PPF with Exempt-Exempt-Exempt tax rule, is the best savings option. We may get clarity on SSA tax rule in this coming budget.
Yes, there is no information available about the authorised list of bank branches. As attached in the article, post office branches have received official circular to accept the deposits under this scheme.

If E-E-E tax rule is followed, then no issue with taxation part.
If interest is taxed, then I believe the same rules of Recurring Deposit/FD deposit taxes are applicable. Kindly read my article on “FD & RD taxes.”
Interest calculation is on monthly balance basis.
Keep visiting and do share your views regularly. Cheers! 🙂

Hi Sreekanth,
But how? She is already almost 10 yrs now and we have only 11 yrs left to invest. Then how could we calculate 9.1 % interest for 21 yrs and maturity amount as 26 lakhs. Please clarify. I think we need only 11 yrs calculation.

Dear Daly,
I agree with you that there is still some confusion out there, regarding the term of SSA a/c.
The govt gazette says, the account can be operated till 21 years from account opening date (it does not say, the term is linked to child’s age). You can make deposits for 14 years from account opening date.

If you get a chance to visit any bank branch or post office branch, do share your experience here. It will help all of us. Cheers!

I Need a Clarification:
1)If i open SSA account in feb 2015, either in Feb or mar 2015 if i deposit 1.5L .It will come under maximum deposit limit of SSA a/c for the 2014-2015 financial year or consider as 2015-2016 maximum limit.If it is consider for 2014-2015, then i can deposit maximum limit for 2015-2016 in SSA a/c.

2)If my daughter got married before completion of 21 years of SSA ,whether she should close the account or can wait for maturity of SSA a/c (21 years).

1 – Yes, you can deposit max contribution of Rs 1.5 Lakh in Feb / Mar 2015. This is considered for tax exemption for the financial year 2014-2015. You can also deposit Rs 1.5 Lakh for the coming FY 2015-16.

My baby’s birth on 03/02/2009
I interested in deposit rs. 10000 per month
So pl. Give information of mutual amount after 21 year and partly withdraw amount after 18 year
My native Amreli district, Gujarat state

Hi
I am having one doubt. If parent/guardian may death immediately after the 1st year premium. Does the child get what benefit under the scheme?
If some or other reason the premium not paid subsequent 3 months due to illness what happen to the policy?
Can you clarify this.

Dear Senthil,
Please go through some of my previous replies regarding to your first query.
It is not mandatory to contribute every month. (Kindly note that it is not a premium). The minimum contribution per year is Rs 1,000.

Hi Sreekanth,
Thanks for your advice. Additional clarification,
1. The point what i am asking is , pre-mature closure of the account is permitted. But what was the amount the child may get?Is there any penalty or some percentage only given back to A/c holder like that.
2. Is online A/c opening and transaction is available?

Dear Senthil,
1 : On Premature closure – The balance at the credit of the account shall be paid along with interest till the month preceding the month of premature closure of the
account. No penalty is applicable.
2 : As of now, online deposit facility is not available

Dear Senthil,
I believe this scheme is available at Post office branches now.
Based on few comments posted here, I think the scheme is not yet available in most of the reputed banks. Do check with your bank and let us know.

Dear Jyoti,
Premature closure is allowed;
1 – on the occurrence of an extreme event (in case of untimely demise of the a/c holder, girl child) (OR)
2 – Where the Central Government is satisfied that operation or continuation of the account is causing undue hardship to the account holder, it may, by order, for reasons to be recorded in writing, allow pre-mature closure of the account (only in cases of extreme compassionate grounds).

Mrs. Reshma Jedhe wants to open the Sukanya Samridhi Savings account in the name of her girl’s child (1.10 years old) in April 2015. He wants to contribute Rs 1,000 every month for 14 years. He also wants to keep this account active till 21 years from the account opening date (or till Child’s age of 25 years). He wants to know, what could be the total approximate interest amount and total maturity amount that he would accumulate under SSA?

Dear Reshma,
In this scenario, your total contribution will be Rs 1.68 Lakh (over a period of 14 years).
The approximate interest amount can be around Rs 4.3 Lakh and the total approx maturity value can be Rs 6 Lakh.

Dear Arvind,
The minimum contribution per year is Rs 1000 and the maximum is Rs1.5 Lakh pa.
You can deposit the amounts as per your convenience (there is no restriction that they should be monthly once). You can deposit in multiple of 100s after depositing Rs 1k.

Dear Atmaram,
I did not get your question.
Principal and interest is payable only when girl child attains 18 years (50 % of fund value can be withdrawn) and the remaining after the completion of 21 years from a/c opening date.

If suppose in sukanya samurridhi scheme, parents or guardian expire in road accident incase after 5 years , how will be account carried on? who will pay the money or how the child will get the money, what will be assurance ? as that time child might be school going.

Dear Sneha,
There is a clause in the Govt’s Gazette, which says, if continuation of a/c is causing undue hardship to the a/c holder (girl child), the premature-closure of SSA account is possible. The account can be discontinued.

Dear Ganesh,
This scheme is governed by Post office Small Savings Scheme rules and I believe NRIs are not eligible to invest in these kind of SSS. (But in the official gazette, there is no clause about NRI’s eligibility)

Dear Kishore,
Very good question.
There is a clause in the official gazette, which says – “Where the Central Government is satisfied that operation or continuation of the account is causing undue
hardship to the account holder, it may, by order, for reasons to be recorded in writing, allow pre-mature closure of the account only in cases of extreme compassionate grounds..”
If the depositor (parent / guardian) is no more, a girl child may or may not contribute towards the scheme. It may cause undue hardship to her. The account can be closed prematurely.

Dear Gomathi,
As of now the rate of interest offered on SSA is 9.1% (higher than that of PPF’s 8.7% for 2014-15), but there is no guarantee this will be maintained in future.
Also, looks like the interest income is taxable, whereas PPF a/c interest income is tax exempted. (SSA interest income tax exemption point may be clarified during this budget session).
Suggest you to wait till March. (If you want to open right now then you can consider PPF a/c)

Dear Anil,
In the event of untimely death of the account holder, the account shall be closed immediately on production of death certificate issued by the competent authority, and the balance at the credit of the account shall be paid along with interest till the month preceding the month of premature closure of the account , to the guardian of the account holder.

Dear Kavtha,
Guardian can continue to deposit the amounts. If the account holder (girl child) is unable to continue the account, under extreme circumstances (like the one you have mentioned), may discontinue the account and can get back the accumulated funds.

Dear Amar,
On SSA a/c – As of now, rate of interst is higher than PPF. But, looks like Interest income is taxable. (We may get clarity by this month end, hope so). Else it depends on what income tax slab are you in?
PPF – It is a tax free investment.
Suggest you to wait for few more days and then take a call.

Dear Nitin,
Very good question. Legally, the guardian/parent can open only one account in the name of a girl child, under SSA Scheme. As of now, I do not think there is any infrastructure (common database) is in place to track down multiple accounts 🙂
May be in future Govt may come up the ways to track multiple a/c (remember these are long term saving a/cs, so lot of time left for them to implement these things) (May be based on depositor’s PAN no etc.,). Let see..

Dear Devasenapathy,
As of now the rate of interest on SSA deposits is 9.1% and on PPF it is 8.7%. From interest rate point of view, Sukanya scheme is better. But remember that these interest rates will vary in future.
Regarding income tax benefits – As of now PPF is better than SSA. The deposits made under Samridhi scheme are exempted from income tax under section 80c. The maturity amount withdrawal is also exempted from taxes. The only grey area is about ‘taxation of interest income.’ If this is also made as ‘tax free income’ then SSA can be better than PPF.

Dear Varsha,
Yes, you can deposit the contributions on a monthly basis. The minimum initial deposit is Rs 1000. After that deposits can be in multiple of one hundred rupees. The maximum allowed deposit(s) is Rs 1.5 Lakh in a single financial year. This limit is applicable for single deposit or multiple deposits.

Dear Ravi,
It is practically impossible to list all the banks (with authorized branches details) here. As per scheme guidelines, the depositor can invest in this scheme in all the authorized branches of commercial banks. The best way to find out about ‘which bank branches are authorized,’ is to check with your bank at your location.

Dear Mathi,
As per my understanding, the contributions (deposits) can be made till the girl child attains 21 years (or) 14 years from the date of opening of the account, whichever is earlier. If you open an account now, you can make 12 deposits. The interest rate may not remain the same every year.
As of now there is no clarity on taxation part with respect to ‘interest income.’

Dear Mathi,
A small correction in the above reply…The contributions are allowed for 14 years from the date of a/c opening. You can deposit for 14 years (till your kid reaches 23 years). The account can be operated till the completion of 21 years from the date of a/c opening. But, you can’t continue operating the a/c after your kid’s marriage.

Ideally I should use the money @ 21 years…should not wait for 14 more years, if the child is 9 year or 10 years, they have to wait for till 23 or 24 years…And after 23 year or 24 years, is that amount can be withdrwan fully? Can you please clarify this?

Dear Swami,
If you are depositing the monies on behalf of a 10 year old girl, you can withdraw 50% of the accumulated money once she turns 18, for education expenses. I believe it is not mandatory to contribute for all 14 years from a/c opening date. Also, she can withdraw the remaining fund as soon as she gets married.

I talked to postoffice folks on this…they clearly told that 14 years is the kids age (mean parents can deposit money till the child get the 14 years age, after that we cann’t deposit)…and @ 18 years, 50% can be withdrwan (its optional) and @ 21 year full can be withdrwan.

Dear Swami,
Thank you for sharing your experience here.
As of now, i can neither agree nor disagree with you.
As per the Govt’s official Gazatte (attached at the end of the post), page no 4 under the ‘Deposits’ section, it is mentioned as ‘Deposits in an account may be made till completion of fourteen years, from the date of opening of the account.‘
Regarding, Maturity of account – Visit page no 5, under closure on maturity it is given as, ‘The account shall mature on completion of twenty-one years from the date of opening of the account.’
Since this scheme is new, there is still lot of confusion among the investors and also the bank/postoffice staff.

If the point opined by the post office staff is right, we can look at it from another point of view – A parent of a 10 year old girl child can then get a chance to deposit only 4 installments. The main intention of the scheme is to generate good corpus for Girl’s education/marriage expenses, which may not be possible with such limited no of contributions. This is my personal opinion.

I will update the post as soon as I find any official/formula communication on this.

I think govt only thought about those people who don’t have internet, other way the rural people. How this plan will accumulate money for Marriage? The way our society spend in marriage this account will not be able to accumulate that amount. Parent can use this account as another option only.

Dear Santanu,
I agree with you. These kind of plans will surely turn out to be chart-busters. Many Investors in rural India do not have easy access to various investment options (like equity,mutual funds etc). The intention behind this plan is good.
There is no doubt that investments in these type of schemes will not give decent returns (inflation adjusted). But, some long term savings (investment) is better than nothing (atleast from rural investors point of view). What are your views?

But would like to know that there is nothing mentioned in the document given by government that invested amount would be covered under 80c for tax exemption. Can you please provide me any other source for the confirmation of this thing?

Dear Dharmesh,
Post office Saving Bank General Rules are applicable to this scheme too. The deposits to the tune of Rs 1.5 Lakh can be exempted from Section 80c.
But there is no clarity regarding the taxation of interest income and maturity income.
I checked with one of my friends who is a Chartered Accountant, he is also of the same opinion. Let us wait for few more days to get more details.

Dear Balasubramanian,
Yes, you can open the account in the mentioned banks. But I believe only authorized branches are allowed to accept the account opening applicaitons. Check with you banks about which branches are accepting the deposits under SSA scheme. Kindly share your experience here (if you could open the account).
The deposits contributed under SSA scheme are eligible for tax deduction under Section 80c. But there is no clarity regarding the tax implications on interest and withdrawals on maturity. We can expect some clarity from the upcoming budget session.

Hi Srikanth,
Is NRIs can open this account on behalf of their Kids, who has other country’s citizen ship? As if now parents has Indian citizens. But in future they may get another country’s citizenship. Will it impact to claim the matured FD in future?

Dear Abhijeet,
Though the Govt’s gazette related to this scheme was released in the first week of December 2014, its only in the last week of this month (21st jan,2015) the Finance ministry notified the interest rate on Sukanya Samridhi scheme.
This might have been the reason to reject your account opening application by your bank. You may contact your bank now. If you still get the same reply from your bank, ask them about any other authorized branch (of same bank in your city/town) which can accept your application.
Request you to come back and share your ‘account opening’ experience here! It might be useful for others too. Cheers!

Dear Ashok,
50% of the accumulated fund can be withdrawn after the girl attains 18 years, towards her education or marriage expenses.
The scheme would mature on completion of 21 years of the girl child.